2 min readNovember – The Everything Rally It was truly a November to remember as equities, Treasuries, investment grade & high yield corporate bonds, and commodities all posted solid gains. The primary drivers were a dovish pivot from Fed members and expectations of a soft landing for the U.S. economy, which translated into the markets eliminating odds of…
3 min readData Supports a Fed on Hold At a recent speech, Fed Chair Powell pushed back on the narrative that the Fed is done raising rates. He continues to reiterate the Fed will be reviewing monetary policy decisions “meeting by meeting” and that more data is needed to show inflation is coming down sustainably. Since the meeting,…
3 min readGDP Doubled in Q3 2023 The first reading for 3rd quarter GDP came in at +4.9%, more than double the +2.1% reading in the 2nd quarter and the most in nearly two years. The US consumer continues to drive the economy forward with personal consumption rising +4%. Spending on services rose by the most in…
2 min readFed Pivot Recent speeches from Fed members have signaled that the FOMC may be finished raising rates, due in part to the rise in long-term bond yields over the past month. The rise in Treasury yields has increased borrowing costs by an amount equal to or even more than a 25-bp rate hike. Dallas Fed…
4 min readTreasury Yields Surge (as of 10/3/2023) September saw Treasury yields rise to the highest levels in decades. Several factors may have led to the increase, including: Higher oil prices – both Brent and WTI are reaching new highs for the year and are close to $100 per barrel. Higher-for-longer narrative – the Fed’s updated projections…
4 min readCPI – headline spike all energy related Headline inflation had been forecasted to increase in August as a result of the highest fuel prices so far this year. So, it came as no surprise that CPI rose +0.6% in August, which marked the highest monthly increase since June of 2022. However, markets were surprised that…
2 min readAugust Bond Yields – Up, then Down To recap, US Treasury yields rose during the first half of the month led by a variety of factors: increased Treasury supply, solid economic data, higher inflation expectations, reduced overseas demand for US government securities and Fitch’s ratings downgrade. The 10-year note reached a 16-year high of 4.36%…
4 min readTwo Down, Two To Go Following July’s FOMC meeting, Fed Chair Powell repeatedly referenced the theme of data dependency and confirmed that the Fed will be focused on the two job reports and two CPI reports still to be released ahead of their September meeting. To date, we’ve seen two of the four reports. First…
3 min readThe Fed is ‘Data Dependent’, as Always As was widely expected, the Fed increased their policy rate last week by 25 basis points to a new range of 5.25%-5.50%. This level is a 22-year high and it marks the 11th time since March of 2022 that the Fed has raised their target rate. The official FOMC…
3 min readSoft Labor Market & Inflation Releases June’s Employment Report was released on July 7th, showing an increase in non-farm payrolls of 209,000 vs. expectations for 230,000, marking the first time that payrolls have come in below market projections in the past 15 months. Additionally, payrolls were revised downward by a total of 110,000 in the…